Are you a revolutionary CEO?
What kind of CEO are you? If you’re in charge of a business, that might sound like the title of your perfect Buzzfeed quiz. But it is something that seriously needs thinking about, especially when it comes to devising a risk management strategy for your organisation.
Following the publication of its Global CEO Outlook Survey 2015 in October, KPMG has taken a look at the different types of chief executives that are out there and how each approaches their role.
KPMG found that 79 per cent of CEOs in the UK were confident about their business prospects for the coming 12 months, and that the majority of these executives fell into the revolutionary category.
The organisation defined revolutionary CEOs as being more optimistic, with customers at the core of their operations, and strengthening their brand as one of their top priorities.
In addition, these individuals were more likely to be investing heavily in sales, advertising and marketing to get their brand name out there, while simultaneously nurturing their relationships with existing clients and customers.
More than half (51 per cent) of revolutionary CEOs also believe that their business will undergo a significant transformation over the next three years, demonstrating the drive and willingness to change that these leaders have. But how does this affect their risk management strategies?
The above findings suggest that revolutionary chief executives need to actively manage their risk profile, as they are more likely to encourage dramatic changes to their companies’ operations, potentially taking their staff and services into risky territory.
What’s more, while these CEOs may be confident about their growth prospects for the year ahead and beyond, we’ve seen in the past decade that the global economy can be extremely unpredictable and that firms may need to have a backup strategy to ensure their plans can still prosper if external market conditions come into play.
With this in mind, it can be said that while a revolutionary attitude to management and leadership is exemplary, it can be risky, meaning that recruiting a risk specialist to see you through challenging times could be the answer.
But what about evolutionary CEOs?
These business leaders are less likely to report growing confidence in relation to their organisation, making them more cautious when it comes to making corporate decisions.
Furthermore, KPMG found that the top priority of evolutionary chief executives was money, with the potential threat of financial damage impacting every decision they make.
The analysis also led to the discovery that evolutionary CEOs have plans to grow their businesses by recruiting extra staff or by taking part in mergers and acquisitions.
This suggests that these leaders may be more likely to seek the services of risk specialists due to their more traditional approach to business management, especially because their main focus is on protecting their finances.
What’s your risk profile?
Now that we’ve discussed how both revolutionary and evolutionary CEOs tend to manage their organisations’ risk profiles, let’s look at how each type of business leader adds risk.
At first, you may think that chief executives who are deemed to be revolutionary would add the highest level of risk to their companies, as they are more likely to spend large proportions of their budgets on new projects and have greater ambitions to progress.
However, it could be argued that evolutionary CEOs are putting their firms at increased risk of reputational and financial damage by being too cautious and pessimistic when making potentially business-changing decisions.
Taking risks is important, especially in today’s ever-changing, digital business landscape – after all, you’ve got to stay ahead of the game if you want to get ahead.
Providing CEOs with advice on how to manage risk, regardless of their characteristics or the size of their company, KPMG partner Nicholas Griffin stated: “Assume that someone, somewhere is figuring out how to change the rules of the game you are playing.”
Meanwhile, head of deal advisory at KPMG Sanjay Thakkar added: “The organisations which are agile and alive to the need to evolve will be more successful than those that don’t.”
While taking risks can be essential for progress, CEOs of all personalities need to ensure they are approaching them in the best possible way, and hiring a risk management specialist is often the best solution. Whether you’re revolutionary or evolutionary, don’t shy away from expert support.
Our 2016 Market Report combines our review of the prevailing conditions in the risk management recruitment market together with the results of our latest employer survey.